The revision of the Outlook to Positive reflects Fitch's view that GCC's
operations could gain momentum resulting from U.S. construction spending
expanding in 2014 driven by continued strength in residential
construction, and to a lesser extent in modest recovery in commercial
and public construction spending. The Outlook also incorporates an
expectation of higher public spending in Mexico in 2014. In Fitch's
view, materialization of such expectations, in conjunction with
scheduled debt amortizations, would likely result in a strengthening of
the company's leverage metrics, which in turn could result in a positive
rating action.

GCC's ratings reflect the company's solid business position in the
cement, ready mix and aggregates segments in the regions where it has a
presence; diversified operations in Mexico and the U.S. in the
non-residential and residential sectors; as well as positive free cash
flow generation through the cycle. The ratings are limited by the
company's high leverage and pressure on profitability given market and
competitive conditions.

At the beginning of 2013, GCC refinanced the full amount of its existing
debt by issuing USD260 million of 2020 Senior Secured Notes and
obtaining a USD 250 million syndicated loan with final maturity in 2017.
As a result, the company improved its maturity profile and increased its
financial flexibility.

KEY RATING DRIVERS

Construction Activity Driving Profitability

A better pricing environment in the fourth quarter of 2013 and in 2014
fueled by higher construction spending in the U.S. as a result of
strengthening in the residential construction market and increased
public spending in Mexico, will likely improve GCC's operating results
and outweigh cost pressures in Mexico in the coming years. In 2013, low
public infrastructure spending in both Mexico and the U.S., slow
residential construction in Chihuahua, high fuel prices in Mexico and
continued competitive pressures in the U.S. resulted in a weak operating
environment for GCC. In addition, a volatile Mexican peso which
strengthened during the first half of the year and a longer-than-average
winter also contributed to lower results from the Company's U.S.
operations. During the last twelve months to September, 2013, the
company's cement volumes declined 0.5% from the same period a year ago.

Business Position Supported by Leading Market Shares

GCC is leader in the state of Chihuahua in all product segments and has
strong cement market positions in North and South Dakota, Wyoming,
Colorado, New Mexico, and the region of El Paso, Texas. The majority of
these markets was less affected during the U.S. housing crisis, and has
shown above average volume recovery in 2012 and 2013, largely as a
result of their exposure to oil & gas and agriculture sectors. GCC's
contiguous North American footprint allows for economies of scale, ease
of distribution and international trading capabilities. According to the
Portland Cement Association (PCA), a majority of the states where GCC
has presence have a better-than-average outlook for the medium term.

Leverage High but Likely to Improve

Fitch expects GCC's total debt-to-EBITDA ratio to be at or below 4.0x by
the end of 2014, with significant improvement in 2015 as the company
resumes revenue and EBITDA growth and scheduled debt amortizations take
place. In addition, Fitch recognizes that operating leverage in the
sector is high and margins could improve more than expected as a result
of higher volumes or an improved pricing environment. GCC's total
debt-to-EBITDA ratio was 4.4x for the LTM ended Sept. 30, 2013, similar
to that registered in the same period of 2012.

Positive FCF Generation Through the Cycle

Fitch expects GCC to generate USD20 million of Free Cash Flow (FCF) in
2013, but to be FCF neutral in 2014, as recovery in its main markets
continues and the company invests in deferred maintenance and to a
lesser extent in growth initiatives. The company's positive FCF
generation history, which in conjunction with asset sales has been used
to reduce debt levels, is factored into the ratings. Also factored into
the ratings is an expectation that the company will continue to pay
dividends conservatively.

Liquidity Supported by Cash Generation

The company strengthened its liquidity position as a result of its
refinancing strategy, and aligned debt maturities to projected cash
flows and extended its debt average life. At Sept. 30, 2013, GCC's total
debt was USD506 million, cash and marketable securities were USD67
million, and short-term debt was USD14 million. Scheduled maturities are
USD20 million in 2014, USD52.5 million in 2015, USD82.5 million in 2016,
USD91.3 million in 2017, and USD260 million in 2020. GCC generated
USD117 million of EBITDA and USD73 million of Cash Flow from Operations
(CFO) during the LTM ended Sept. 30, 2013.

RATINGS SENSITIVITY

Future developments that may, individually or collectively, lead to a
positive rating action include:

--A rating upgrade could derive from improved operating performance that
leads to higher operating margins and EBITDA generation, which in
conjunction with scheduled debt amortizations, translates into lower
leverage. A total debt-to-EBITDA ratio remaining below 4.0x, while
maintaining adequate liquidity and a manageable debt maturity profile,
could have positive implications.

Future developments that may, individually or collectively, lead to a
negative rating action include:

--A negative rating action could be triggered by a deterioration of the
company's credit metrics and cash position due to weak operational
results, reflecting increased price competition or higher costs;
deterioration in FCF generation driven by increasing working capital
needs and capex; and declining EBITDA margins. A debt-to-EBITDA ratio
consistently at or above 5.0x will also likely result in a downgrade.

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